-A Beneficiary IRA was established in 2010 when the Father died. The Father’s son was the beneficiary of the original IRA.
-The son beneficiary passed away in 2023, without taking an RMD at age 88.
-The spouse of the son was 100% beneficiary of the son’s Bene IRA (from his father).
How should the new Bene IRA be titled?
Who is responsible for the 2023 RMD and what account does it come out of?
What rules dictate future RMDs?
Thank you!
I’m confused by your third bullet. Are you saying that the spouse’s Inherited Bene IRA (3rd person’s IRA) is now subject to the 10 year rule, even though the original IRA owner died before 2020? What if the husband (second owner, original owner of first beneficiary IRA) had held his Bene IRA for 10+ years. Is it required to be distributed? Should the spouse continue the RMD schedule that the original father had?
Yes, once a pre Secure Act inherited IRA beneficiary passes, the successor becomes subject to the 10 year rule, meaning that this inherited IRA must be drained by 2033. The 10 year rule would never have applied to the son, but once the son passed an initial 10 year rule must apply to the spouse of son (successor beneficiary). But in addition, the spouse of the son must continue the annual LE RMDs that the son was taking. But because of the son’s age, the divisors are so low that there is only a couple of years left before the IRA will be drained, so that makes the 10 year rule moot. The age of the son’s spouse is irrelevant. Another way of putting this is that the IRA must be drained at the same rate and will last the same length of time that it would have if the son had not passed.
Permalink Submitted by Alan - IRA critic on Tue, 2023-03-21 21:18